NIIT Limited · NSE:NIITLTD
NIIT — FY2009 Earnings Presentation
37 slides from NIIT's earnings presentation, May 28, 2009
Slide 1: Investor Meet, May 28, 2009
Investor Meet May 28, 2009 1 Agenda Part I: NIIT Overview Part II: Environment Current Performance Business Strategy Business Direction 2 1
Slide 2: India's Demographic Advantage: Global Workforce 2020
Part I: NIIT Overview 3 India’s Demographic Advantage: Global Workforce 2020 56 million shortage in the World 46 Million surplus in India Note: Potential surplus is calculated keeping the ratio of working population (age group 15-59) to total population constant. Source: US Census Bureau; BCG analys
Slide 3: The Global Talent Shortage / India: Skill Supply Chain
The Global Talent Shortage Huge gaps in talent demand and supply in all sectors of the economy Increasing Globalization – Work mobility Changing Demographics – Ageing population Services led economy – New skill sets Talent Gap at the top; Skills Deficit at the bottom 5 India: Skill Supply Chai
Slide 4: Education, Employability, Productivity
Education, Employability, Productivity “Growth will get choked out if skills development does not take place” - Planning Commission Huge gap in talent supply and demand, in all sectors of the economy Less than 5% of labor force in 19-24 age group has a certifiable skill School infrastructure i
Slide 5: Leadership in Global Talent Development
Leadership in Global Talent Development Global Opportunity Set Globalization Demographics Services Led Economy Ageing Work Multi-Sector Population Mobility Growth Potential Personality Individuals Corporates Skills Knowledge Schools Multiple Government Delivery Distributed Formats Global Skills Deli
Slide 6: NIIT: Servicing the full labor supply chain
NIIT: Servicing the full labor supply chain School Learning Individual Learning Corporate Learning Solutions Solutions Solutions Target Audience School children Young adults Working professionals Value Proposition Academics Employability Productivity Customer School Individual Corporate • IT Trainin
Slide 7: NIIT's growth in the last years
NIIT’s growth in the last 4 years 14,000 37% CAGR Revenue 11,486 12,000 10,068 10,000 7,951 8,000 6,000 4,507 4,000 2,000 - 25% CAGR FY06 FY07 FY08 FY09 20% CAGR 1400 EBITDA PAT 1186 698 * 1200 800 756 1036 1000 700 774 600 + 13 %547 + 43 800 % 603 500 600 401 400 400 300 200 200 FY06 FY07 FY08 FY09
Slide 8: Multiple Levers of Growth for NIIT
India Employability Training Opportunity Total Working Professionals 16.3m 19m Working Pros Target 2m 2.0m Non- Tech Tech Grads Graduates 0.4m Grads 2.9m 3.3m Non-Tech Tech Students Students Students 11.0m 9.8m 1.2m Currently addressed ~450k; 36x potential 15 Multiple Levers of Growth for NIIT Expan
Slide 9: ILS - IT Training
ILS - IT TRAINING 17 IT Training • Individuals, 16-25 years • Career, Career-edge and Skills Upgrade courses • For Engineers, Science / Arts /Commerce graduates, Working Professionals • Instructor-led, supplemented by e-learning • India. China. Developing World Improving Individual Employability in
Slide 10: Demand for IT & ITES professionals
Demand for IT & ITES professionals IT-BPO Industry outlook Skills ■ People directly employed 4.0 mn • Software: Development & Testing Exports $ Bn $120 • Infrastructure Management • MIS implementation & Support 2.5-3.0 mn • Multimedia 2.23 mn $60-62 • Voice/Tech Support $47 • Knowledge Process outso
Slide 11: Partnership with Leaders / NIIT: In China
Partnership with Leaders Pillars of Information Technology OPERATING SYSTEMS NETWORKS INFORMATION APPLICATIONS DATABASES STORAGE 21 NIIT: In China • 192 centers • Ultra modern center in Shanghai • New center in Wuxi Software Park • “Best IT Training Company of the Year” Award 22 11
Slide 12: NIIT: Rest of the World; ILS Financial Services Training
NIIT: Rest of the World •159 centers •Vietnam, Nigeria, Botswana •Latin American Centers of Excellence Continued expansion. Increasing recognitions 23 ILS – Financial Services and Management Training (FMT) Logos used are trademarks of respective organizations Partnership with leaders in the industry
Slide 13: ILS - Uniqua; English & Professional Life Skills
ILS - Uniqua The latest addition to NIIT‟s offerings • Joint venture between Genpact & NIIT • Operating under the brand name „NIIT Uniqua‟ • Offers training to meet the growing requirement for professionals skilled in business process knowledge • NASSCOM estimates additional requirement of 1.4 mn pr
Slide 14: English & Professional Life Skills
English & Professional Life Skills Common Test existing Train to get acceptable employees employees to standard with against the given achieve standard employers standard Train potential Define employees to recruitment qualify standards 27 Another Step Forward…. District Learning Centre-Chhindwara T
Slide 15: School Learning Solutions
School Learning Solutions 29 Opportunity Space • Teachers Training - 10 million Teachers • Vocational Education -24x7is an emerging area 3,000 schools Collaboration Portal ERP Math LAB & Science LAB 100,000 schools IT Education Class Room 1 Mn schools 30 15
Slide 16: Next 3 years addressable opportunity; NIIT SLS credentials
Next 3 years addressable opportunity Sarv Shiksha Abhiyan 600 districts ICT@School 60,000 schools PPP in Govt schools 6,000 schools Pvt Schools – Class room solutions 10,000 schools Pvt Schools- Lab Solutions 5,000 Schools School ERP & Portal Solutions 2,000 Schools Teacher‟s training 500k Pre-servi
Slide 17: NIIT eGuru solutions portfolio
NIIT eGuru solutions portfolio Interactive Class Room Math Lab Science Lab Quick School (ERP) Web & Multimedia curriculum Shared computing 33 16,000+ hours of Content School Mind Champions Academy covering Science, Maths, Infra ERP & Digital Arts festival Consultancy Social Studies, English & IT Col
Slide 18: NIIT eGuru differentiators
NIIT eGuru differentiators Teaching & learning Materials eGURU LAB IT LAB Computer aided experimentation Server Academic impact measurements Comprehensive Lab solutions Support & service levels Designed with NCF objectives Curriculum solution and not just content Computer Aided Experimentation MATH
Slide 19: Corporate Learning Solutions
Corporate Learning Solutions 37 Our Credentials Largest 12000 + e-Learning Person Years Content 12,000 Hrs of 20,000+ Training 150+ University of Experience e-Learning Days per Year Library Courses 1500+ print 3500+ e-learning 285,000+ Student 20,000 Hours catalog library Learning Hours of ILT 1500+
Slide 20: Diverse Customer Portfolio; Corporate Training Market
Diverse Customer Portfolio Sales, Channel, and Customer Education Business Process Improvement Training Administration Services Regulatory Compliance New Product Rollout Employee On-boarding and Corporate Communications IT Productivity and Skills Development Other Solutions Management and Leadersh
Slide 21: Corporate Learning Solutions
Corporate Learning Solutions • 3500+ titles; SAAS model Learning • 3Mn+ learners on Khub Invest • Largest print & eLearning library - High growth (21%) Products • Virtual labs now available „in a box‟ - High margin (SAAS) • Field sales force doubled in North America - # 2 position • Partnership with
Slide 22: Part II: Global Economy: continuing turmoil
Part II: Environment Current Performance Business Strategy Business Direction 43 Global Economy: continuing turmoil Corporate sector continues to operate in a state of uncertainty Consumer sentiment remains subdued across sectors Banks across US, Europe & Asia reported over USD 700 Bn in credi
Slide 23: Indian Economy: also affected, but relatively better off
Indian Economy: also affected, but relatively better off GDP growth estimates for FY09 at ~6.5% and for FY10 at ~6% FIIs pulled out $13 Bn from Capital Markets in CY08 ; have turned positive in the current year Stock Markets hit upper circuit on opening post elections, on expectations of a sta
Slide 24: Education & Training Sector: current environment
Education & Training Sector: current environment Hiring forecast for India improves marginally for Q1 FY10 (Net Employment Outlook at 25% vs 19% LQ), but majority of employers remains undecided. Of the employers surveyed, 25% expect an increase in staffing levels, 6% anticipate a decrease, and 64%
Slide 25: FY'09: Consolidated Financials
Environment: Q4 FY09 Consumer sentiment affected by the following – Delay in joining dates of fresh hires – Job losses in IT sector – Fear of anti-outsourcing measures by the US government General hiring in IT & ITES affected; however, job market for specialist skills remained robust Hiring fr
Slide 26: FY'09: Results Highlights
FY’09: Results Highlights SWR up 21% to Rs. 16,893 Mn Net revenues up 14% to Rs. 11,486 Mn EBITDA up 15% to Rs. 1,186 Mn; EBITDA% up 4 Bps (including negative impact of first year of operations of NIIT Uniqua) PAT at Rs. 696 Mn; down 8% (due to lower share of associate profit and impact of F
Slide 27: NIIT's Businesses; Capital Structure
NIIT’s Businesses Where does revenue come from? Schools, Where does profit come from? Corp, 34% 8% ILS - New Biz, 2% Schools, ILS-IT, 55% 18% Corp, 15% FY'09 SW Revenue ILS, 67% FY'09 EBITDA 53 Capital Structure Total Capital employed – Rs. 8502 Mn Sources of Funds • No of Shares - 164.7 Mn • Face V
Slide 28: ILS - IT: Highlights
ILS - IT: Highlights Rs. Mn JFM'09 JFM'08 YoY FY09 YoY System wide revenues 2,662 1,974 35% 9,317 31% Net Revenues 1,035 900 15% 3,982 23% EBITDA 237 195 22% 865 30% EBITDA % 23% 22% 124 bps 22% 123 bps • SWR Geo Mix: India 60%, China 23%, ROW 17% • Enrolments: Overall + 13%; Higher growth in shorte
Slide 29: SLS and CLS: Highlights
Rs. Mn JFM'09 JFM'08 YoY FY09 YoY Net Revenues 442 379 16% 1,383 37% EBITDA 80 44 83% 214 63% EBITDA % 18% 12% 653 bps 15% 246 bps • GSA contributed 73% of revenue, up 39% YoY; Non GSA grows 31% YoY • Nationwide launch of E-Guru Interactive Classroom product • Added “Quick school”, a school ERP syst
Slide 30: NIIT: Business Strategy
NIIT: Business Strategy 59 Individual Learning Solutions - IT India • New products to address market demand: 99days diploma programs, Business Systems & Information Management track in GNIIT, new products in IMS space • Use of vLabs to efficiently enhance learning effectiveness • Selective capacity
Slide 31: Individual Learning Solutions - FMT
Sizeable growth opportunities for Tier II / III cities 61 Individual Learning Solutions - FMT • Strengthen program driven • Focus on PSU Banks relationships with Management recruitment (IBPS) Institutes • Participation in Brach • Add more institutes and Products Expansion of Private banks • Leverage
Slide 32: School Learning Solutions
School Learning Solutions Growth Strategy • Leverage e-GURU product portfolio • Selective focus in Government Business • Scale up private school business by focusing on robust sales management Operating Strategy • Cost leadership and technical superiority in government schools • Cash Management – Re
Slide 33: Corporate Learning Solutions
Corporate Learning Solutions Growth Strategy • Grow the LP business through aggressive sales and tele-sales • Expand training outsourcing solutions in Europe and APAC • Focus on Government orders in India Operating Strategy • Cost Management through consolidation; compensation structuring and variab
Slide 34: NIIT: Business Direction
NIIT: Business Direction 67 Individual Learning Solutions Key Business Challenges • Customer sentiments weak due to present uncertainties in IT hiring • Hiring slowdown in financial services sector Business Outlook • IT Training to have steady growth in FY10, NIIT’s Initiatives and Responses enrollm
Slide 35: School and Corporate Learning Solutions: Business Direction
School Learning Solutions Key Business Challenges • Leverage initial success of eGuru for rapid scale up of private schools business • Capital intensity in government schools Business Outlook • Growth in GSA segment to remain strong NIIT’s Initiatives and Responses • Strong growth in Private • Selec
Slide 36: Summarizing: IP led Growth Strategy
IP led Growth Strategy IP for • Non Linear Growth CLS • Reach & Scalability Global Talent • Competitive Entry Barriers Development Blended Corporation • Speed to Market Learning SLS • Cost Leadership Web Based Training Computer Based ILS Training Element K eGurucool IFBI & Imperia, Franchising in Un
Slide 37: NIIT: Today and Tomorrow
NIIT: Today and Tomorrow • We are today, the market leader with strong credentials and competencies • We have a strong financial track record, and in the past have successfully dealt with market adversities and uncertainties • We have successfully transitioned from an IT Training Company to a Global